Los Angeles County Consumer Sentiment Index from Lowe Institute of Political Economy at Claremont McKenna College Shows Slight Overall Decline in First Quarter 2017

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LOS ANGELES–(BUSINESS WIRE)–The Lowe Institute Los Angeles Consumer Sentiment Index (“Index”)
declined by approximately two percent to 103.73 in the first quarter of
2017. This follows a sharp 12 percent decline in the fourth quarter of
2016 to 106.29.

“We attributed the sharp fourth quarter decline to Los Angeles’ reaction
to the results of the presidential election and the first quarter 2017
data, with consumer sentiment essentially holding steady, supports that
analysis,” noted Marc Weidenmier, Director, Lowe Institute of Political
Economy. “However, there was no rebound in consumer sentiment and thus
the Index provides reason for continued caution and expectations of slow
growth.”

The Index also brought to light some key differences emerging among
different ethnic and age groups that offer some important insights that
can be attributed to changing national government policies and programs.

First quarter results show a significant – 11.2 percent – decline in
consumer sentiment among Hispanics and 9 percent decline for African
Americans. Conversely, there was a 5.4 percent increase in consumer
sentiment among Caucasians. “Los Angeles has a large Hispanic population
with a higher concentration than many other areas in the U.S. This is
one aspect reflected in the Los Angeles Index that differentiates the
findings from broad national sentiment surveys,” said Weidenmier.

Weidenmier also noted the Index shows a reversal in sentiment among
senior citizens (65+) with an 8 percent decline after this group had
conveyed a big rise in confidence between the third and fourth quarters
of 2016.

“Los Angeles is often a harbinger of economic change for the nation,”
said Robert J. Lowe, co-founder of the Lowe Institute and Chairman of
national real estate company, Lowe. “This is one of the reasons we
decided to launch a consumer sentiment index for Los Angeles as it can
not only be a valuable tool for our local businesses and government but
also offer guidance to those watching the national economy.”

Los Angeles County has a population of more than 10 million and is the
third largest metropolitan economy in the world. The Institute deemed
this a region that could benefit from its own consumer sentiment survey.
Consumption accounts for, on average, 70 percent of all U.S. economic
activity and its importance cannot be overstated.

Of the survey’s seven questions the query regarding respondents’
thoughts on whether the coming year will be a good time to buy a new car
is considered a key factor in economic outlook. The fourth quarter 2016
results showed people starting to hesitate when considering making a new
car purchase. The current Index shows a continued drop – 5.7 percent –
in consumer plans for new car purchases. “The Index results are already
starting to play out in our economy as new car sales have fallen,” said
Weidenmier.

About the Survey

The representativeness of the Lowe Institute Los Angeles Consumer
Sentiment Index is ensured by its being constructed from a random sample
of 500 people stratified on the basis of age, gender, ethnicity, income,
and zip code. The survey questions ask respondents seven questions
concerning their current situation, perceived future prospects, and
spending plans. People are asked to assess whether they see their
financial situation getting better or worse over the coming year and how
this is linked to their perception of recent business conditions both in
Los Angeles and in the nation as a whole. They are also asked directly
whether they think their chances of finding a new job are likely to
improve over the coming year and whether they think the next year would
be a good time, or a bad time, to buy a new car. The first quarterly
survey was done in the second quarter of 2015 and has proceeded
quarterly since, providing a baseline of data upon which to build.
Additional information is available at www.laconsumersentiment.com

About the Lowe Institute

Founded in 1986 by Robert J. Lowe and his father Thomas Lowe, the
Institute offers a variety of programs to provide learning opportunities
for students outside the classroom including: a faculty-student research
program, a public lecture series and a public policy focus on economic
forecasting. The Institute strives to enhance existing curricula and
provide emphasis on public affairs and the attendant concentration in
economics and government. The mission of the Lowe Institute is to
promote undergraduate education in economics and to enhance the public
visibility of the College and its sister institutions.